Sony, Toshiba expected to spend more on chips

According to IHS, Japan's
consumer electronics giants have been hurt by a range of factors in
2012, including economic slowdown in key markets, decreased demand in
some product segments and ferocious competition from rivals based in
South Korea and Japan. All four of Japan's major consumer electronics
OEMs are expected to lose money this year.

Cumulatively,
Panasonic, Sony, Toshiba and Sharp are expected to incur a 7 percent
decline in sales this year compared to last year, IHS said.

IHS
noted that financial difficulties have prompted Sony to issue bonds
twice in 2012 in an effort to raise funding. The company's credit rating
has been dropped to the lowest investment grade by Moody's and is now
in the process of eliminating 10,000 jobs by March 2013, IHS noted. Sony
is also selling off assets such as manufacturing plants and shares in
joint ventures.

Despite the plights of the company's, IHS said
the recent Japanese consumer electronics show, CEATEC, demonstrated that
the spirit of innovation is still alive and well at both firms. IHS
predicts Sony will bounce back with 3.7 percent revenue growth in 2013,
but that Toshiba's sales will decline a further 1 percent next year.
Declines in 2013 revenue are also expected at Panasonic and Sharp, IHS
said.

"The Japanese consumer electronics companies face a
changed marketplace, due to the rising influence of Apple and other
competitors that have redefined some of the product segments or else
simply just taken away share in key areas," Robles-Bruce said.
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